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U.S. Sanctions Shipping Companies for Transporting North Korean Coal

sanctions on North Korean coal and shipping companies
Bulk carrier loading loading coal (file photo)

Published Dec 8, 2020 6:52 PM by The Maritime Executive

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a series of sanctions targeting shipping companies that have been consistently transporting North Korean coal in violation of UN Security Council resolutions. Six companies, including in China and Vietnam, along with four ships, were designated in today’s actions which the State Department said was a follow up to its warning in May 2020 on the deceptive shipping practices used to evade sanctions.

“The DPRK (Democratic People’s Republic of Korea) continues to circumvent the UN prohibition on the exportation of coal, a key revenue generator that helps fund its weapons of mass destruction programs,” said Secretary Steven T. Mnuchin. “The North Korean regime often uses forced labor from prison camps in its mining industries, including coal, exploiting its own people to advance its illicit weapons programs.”

The State Department, however, also aimed its actions at China saying that the authorities must implement and enforce the UN resolutions, including by taking action against companies, individuals, and vessels that engage in prohibited trade, including the procurement of North Korean coal.

The six designated entities and four vessels identified as blocked property are blocked under Executive Orders from President Donald Trump. They include the China-based Weihai Huijiang Trade Ltd along with Always Smooth Ltd and Good Siblings Ltd, the latter two are also registered in the United Kingdom. The three companies were all linked to the transportation of North Korean coal. The Hong Kong-based Silver Bridge Shipping Co-and Vietnam-based Thinh Cuong Co Ltd were also blocked for operating in the transportation industry in North Korea. 

The Korean Daizin Trading Corporation was cited as an agent involved in the trade and purchase of coal. In at least one instance, the State Department said Daizin Trading claimed that the coal is of Russian origin, obfuscating its North Korean origin. Daizin Trading’s export activities are estimated to include the transport of thousands of tons of coal and iron ore to Vietnam.

Four vessels were also included in today’s announcement. They included the Asia Bridge, in which Weihai and Good Siblings have an interest, and the Lucky Star, in which Weihai and Always Smooth have an interest. The State Department said that both vessels had transported coal from North Korea and undergone repairs in North Korean ports. Also cited was the Calm Bridge, owed by Silver Bridge Shipping, which loaded and transported North Korean Coal. The Vietnam-flagged Star 18 was also blocked for loading in North Korea and traveling to a Vietnamese port.

The vessels had been previously cited in UN Security Council reports dating back to 2019 on North Korea’s coal trade and sanction busting activities. The UN has increased sanctions on North Korea since 2006 and in 2017 banned North Korean coal exports in response to the country’s growing ballistic missile program. 

Today’s blocking action requires the reporting of property or interests of the companies in the U.S. as well as prohibits all dealings by U.S. persons or within the United States with the blocked entities.